## Developing a Project Concept Plan

The Phase 1 lead person should now have a prioritized Feature/Functionality List annotated by IT with approximate development lengths and an availability date.

Figuring out people costs: The Phase 1 lead person should work with IT to figure out how many developers will be needed to develop A, B, and C features. Consult the accounting department in order to understand what the fully burdened cost per person in your company is. A rule of thumb cost is \$180,000 per person per year. Add up the number of man-hours, divide by 40 (hours in a week), divided by 52 (weeks in a year). This will give you the approximate cost for developers. For estimated costing, it is not necessary to understand overlaps or pregnant processes, only the days or weeks that will be spent developing the project.

Example: IT expects that a project will take 280 man-weeks to complete.

Development time will be: 280/52 = 5.38 man-years

Development cost will be: 5.38 X \$180,000 = \$969,230

The Phase 1 lead should also figure that development time accounts for only 50 percent of the time and cost it takes to bring a project to completion. If IT says they can complete the project in six months the Phase 1 lead person should estimate that the project will be available in twelve months, since performing Quality Assurance, Beta, and, if necessary, staging and release of hardware and software will take an additional six months. Don't cut this time short. This is your quality time, and a project not properly tested is guaranteed to fail. It is ten times more expensive to fix a project once it is in the users' hands than before it is released.

Example: Based on 5.38 development years

Quality Assurance, Beta, and staging hours: 5.38 X \$180,000 =

People cost for project: \$969,230 X 2 = \$1,938,460

When estimating a project for budgeting it is wise to double the cost and round up. Estimated people cost for the project will be: \$4,000,000

Many times the Phase 1 lead person knows up front the head count assigned to a project and the date the company expects the future project to be available. Don't plan a preliminary schedule by counting backwards. Take the time to review IT's estimates. If the time frame causes the project to be late, reevaluate the A, B, and C priorities. If necessary, shuffle the priorities. By prioritizing features differently, a schedule may map with the company's expectations. Make sure to present to executive staff the original schedule and the shuffled schedule and explain the pros and cons of going with each.

Figuring out equipment costs: Some projects require new hardware and software to be purchased, such as when updating PCs company wide, or providing the sales organization with PDAs. To estimate equipment costs you will still need the same initial documents, including the Business Requirements Document and the Feature/ Functionality Report. Don't spend the time now getting bids or identifying specific vendors. The first step is to estimate the cost. Identify a generic configuration of hardware that you believe will meet your needs. Find out the cost. Multiply this cost by the number of users. Estimate that it will cost you twice as much for software as for the hardware. Estimate that it will cost twice as much to install and support the hardware, on a yearly basis than the software cost. Use list prices for the hardware; this will provide you with buffer room.

Example: New PCs for employees:

Each PC will cost \$1,500

Software will cost \$ 3,000

Yearly installation and support will cost \$6,000 per PC Estimated cost per PC: \$10,500 year one \$6,000 for each additional year

Estimated features and release date: The Feature/ Functionality Report is used to provide a feature list and availability date. Take the estimate provided by the technical lead and double it. This doubling should provide you with adequate time to test and roll out the solution.